Naira falls to new low, trades N1,045/$ at parallel market

The naira, on Wednesday, plunged to a new all-time low at the parallel section of the market.

Bureaux De Change operators (BDCs), who spoke to TheCable on Wednesday, quoted the naira at N1,045 to the greenback.

The figure represents a depreciation of N45 or 4.5 percent from the N1,000 it traded two weeks ago.

The street traders put the buying price of the dollar at N1,020 and the selling price at N1,045, leaving a N25 profit margin.

“The dollar is presently scarce,” Aliyu, a street trader in Lagos, said. 

At the official side of the market — the investors’ and exporters’ window (I & E) — the local currency depreciated by 0.70 percent to close at N776.80 to the dollar on Wednesday. 

According to details on FMDQ OTC Securities Exchange, a platform that oversees official FX trading in Nigeria, a total of $60.30 million FX transactions were made at the I&E window.

The poor performance of the naira against the dollar has been linked to liquidity problems.

Data obtained from the Central Bank of Nigeria (CBN) shows Nigeria’s foreign exchange reserves dropped to $33.23 billion (two-year low) at the end of the third quarter of 2023.

The international reserves declined by $5.01 billion on a year-on-year basis relative to the $38.25 billion reported at the end of September 2022.

On a quarter-on-quarter basis, the foreign reserves depreciated by $881.84 million, having closed the second quarter (Q2) at $34.11 billion.

The World Bank recently declared the naira and the kwanza of Angola as the “worst performing currencies” in Africa so far in 2023.

The organisation said both currencies have depreciated by nearly 40 percent.